DoD's $2.37M contract with Boeing for coating durability research shows fair value, but limited competition raises concerns
Contract Overview
Contract Amount: $2,371,159 ($2.4M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2015-07-02
End Date: 2019-07-02
Contract Duration: 1,461 days
Daily Burn Rate: $1.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 26
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: IGF::OT::IGF OTHER SERDP PROJECT WP 2521 FOR STANDARDIZED TEST METHODOLOGIES FOR LOW OBSERVABLE COATING DURABILITY
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $2.4 million to THE BOEING COMPANY for work described as: IGF::OT::IGF OTHER SERDP PROJECT WP 2521 FOR STANDARDIZED TEST METHODOLOGIES FOR LOW OBSERVABLE COATING DURABILITY Key points: 1. Contract value appears reasonable given the specialized R&D nature and contractor's expertise. 2. Competition was limited, suggesting potential for higher costs than a more open process. 3. Contract duration and cost-plus structure introduce some performance and cost risks. 4. This contract supports critical defense research into material science and survivability. 5. Boeing is a major defense contractor with a strong track record in aerospace R&D. 6. The contract falls within the broader category of physical and engineering sciences research.
Value Assessment
Rating: good
The contract's total value of $2.37 million for a four-year research project seems aligned with specialized R&D efforts in the defense sector. Benchmarking against similar contracts for materials science research is challenging due to the unique nature of 'low observable coating durability.' However, considering the contractor's expertise and the project's scope, the pricing appears fair. The cost-plus-fixed-fee structure, while common for R&D, necessitates careful oversight to manage costs effectively.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 26 proposals suggests a robust competitive environment. A high number of bidders generally leads to better price discovery and potentially lower costs for the government, as contractors are incentivized to offer competitive terms.
Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it increases the likelihood of securing the best value and prevents potential price gouging that can occur with less competitive solicitations.
Public Impact
The primary beneficiary is the Department of Defense, which gains enhanced understanding of coating durability for military assets. Services delivered include research and development of standardized test methodologies. The geographic impact is primarily within the defense sector's operational readiness and technological advancement. Workforce implications include specialized research roles for scientists and engineers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can incentivize cost overruns if not managed tightly.
- The four-year duration presents a long-term commitment with potential for scope creep.
- Reliance on a single contractor for this specific R&D may limit future innovation options.
Positive Signals
- Awarded under full and open competition, ensuring a broad range of potential solutions were considered.
- The contractor, Boeing, is a reputable entity with extensive experience in aerospace and defense R&D.
- The research directly addresses a critical need for improved material performance in defense applications.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical and engineering sciences. The market for defense-related materials science research is specialized, with a few key players like Boeing dominating. Spending in this area is driven by the need for technological superiority and enhanced survivability of military platforms. Comparable spending benchmarks are difficult to establish precisely due to the niche nature of 'low observable coating durability,' but R&D contracts of this magnitude are not uncommon within the DoD.
Small Business Impact
The contract data indicates no specific small business set-aside. Given the specialized nature of the research and the prime contractor (Boeing), it is unlikely that small businesses would be the primary awardees. However, Boeing may engage small businesses as subcontractors for specific components or services, though this is not explicitly detailed in the provided data.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Army's contracting and technical offices. The cost-plus-fixed-fee structure necessitates rigorous financial and performance monitoring to ensure adherence to the SOW and budget. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse. Transparency is generally maintained through contract award databases and reporting requirements.
Related Government Programs
- Department of Defense Research and Development Programs
- Materials Science Research Contracts
- Aerospace Engineering Services
- Coating Technology Development
- Low Observable Technology Research
Risk Flags
- Cost-plus-fixed-fee structure requires diligent oversight to prevent cost overruns.
- Long contract duration increases potential for scope creep and budget fluctuations.
- Specialized R&D nature makes direct value benchmarking challenging.
Tags
department-of-defense, department-of-the-army, research-and-development, materials-science, aerospace, full-and-open-competition, definitive-contract, cost-plus-fixed-fee, california, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $2.4 million to THE BOEING COMPANY. IGF::OT::IGF OTHER SERDP PROJECT WP 2521 FOR STANDARDIZED TEST METHODOLOGIES FOR LOW OBSERVABLE COATING DURABILITY
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $2.4 million.
What is the period of performance?
Start: 2015-07-02. End: 2019-07-02.
What is the track record of The Boeing Company in fulfilling Department of Defense R&D contracts?
The Boeing Company has a long and extensive history of fulfilling complex research and development contracts for the Department of Defense across various domains, including aerospace, materials science, and advanced manufacturing. They are a primary defense contractor with significant resources and expertise dedicated to government R&D initiatives. While specific performance metrics for every contract are not publicly detailed, Boeing's continued selection for major defense programs suggests a generally positive track record in delivering on technical requirements and program objectives. However, like any large contractor, they have faced scrutiny and challenges on specific projects regarding cost, schedule, and performance, necessitating robust government oversight.
How does the value of this contract compare to similar R&D efforts in materials science?
Direct comparisons for 'standardized test methodologies for low observable coating durability' are difficult due to the highly specialized nature of the research. However, R&D contracts in advanced materials and aerospace engineering for the DoD can range from hundreds of thousands to tens of millions of dollars, depending on scope, duration, and complexity. A $2.37 million contract over four years for a specific research objective, especially one involving sensitive defense applications like low observability, appears to be within a reasonable range. Factors such as the number of personnel involved, required testing equipment, and the novelty of the research would influence the final cost. Without more granular data on comparable projects, a precise value-for-money assessment is limited, but it doesn't immediately appear excessive for its stated purpose.
What are the primary risks associated with this cost-plus-fixed-fee contract structure?
The primary risks associated with a Cost-Plus-Fixed-Fee (CPFF) contract structure, like the one awarded to Boeing, revolve around cost control and potential for scope creep. In a CPFF arrangement, the contractor is reimbursed for allowable costs incurred, plus a fixed fee representing profit. This can incentivize contractors to incur higher costs, as their profit margin (the fixed fee) remains constant regardless of the total project expenditure. Consequently, the government bears the risk of cost overruns. Effective risk mitigation requires stringent government oversight, detailed cost tracking, and clear definition of the Statement of Work (SOW) to prevent unauthorized expansion of project scope. Regular audits and performance reviews are crucial to manage these inherent risks.
How effective is the 'full and open competition' process in ensuring value for this type of specialized R&D?
The 'full and open competition' process is generally the most effective method for ensuring value in government contracting, including specialized R&D. By allowing all responsible sources to submit bids, it fosters a competitive environment that drives down prices and encourages innovation. For this specific contract, the fact that 26 proposals were received indicates a healthy level of interest and competition within the relevant industry. This broad participation increases the likelihood that the government will receive technically sound proposals at competitive prices. While specialized R&D can be complex to evaluate, the competitive process ensures that multiple approaches and cost structures are considered, ultimately benefiting the taxpayer by identifying the best overall value.
What are the implications of the contract's duration (4 years) on its overall value and risk?
A four-year duration for a specialized R&D contract like this one has several implications. On the positive side, it allows for in-depth research, development, and testing, which is often necessary for complex scientific endeavors. This extended timeframe can lead to more robust and reliable outcomes. However, a longer duration also increases the risk of cost escalation due to inflation or unforeseen technical challenges. It also extends the period during which the contractor might experience personnel turnover or shifts in strategic focus. For the government, a longer contract requires sustained oversight and commitment. The value is realized through the potential for significant technological advancement, but the risk lies in ensuring the project remains on track, within budget, and continues to meet evolving defense needs over the entire period.
What is the significance of the North American Industry Classification System (NAICS) code 541712 for this contract?
The NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' accurately categorizes this contract. It signifies that the work performed involves systematic study to gain new knowledge and understanding in scientific and technical fields, excluding biological sciences. This code helps classify the contract within the broader economic landscape, allowing for statistical analysis and comparison with other R&D activities. For this specific contract, it highlights that the research focuses on material properties, testing methodologies, and engineering applications related to physical sciences, rather than biological or medical research. This classification is crucial for understanding the contract's scope and its place within the government's R&D spending portfolio.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › Natural Resources and Environment R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Offers Received: 26
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 7755 E MARGINAL WAY S, SEATTLE, WA, 98108
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $2,371,159
Exercised Options: $2,371,159
Current Obligation: $2,371,159
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-07-02
Current End Date: 2019-07-02
Potential End Date: 2019-07-02 00:00:00
Last Modified: 2026-01-06
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